A cryptocurrency broker that the Biden administration sees as the key person in the ransomware epidemic that took place of late is legally registered in the Czech Republic, however, he does not have an office there, reports Bloomberg News.
It was the first crypto exchange that the US has blacklisted. However, the crypto broker has denied any involvement in the rise in cybercrimes. But industry experts say this is an instance of the “shadowy” side of the industry that has on several instances permitted hackers to thrive well and allowed them to launder millions of dollars illegally.
These laundering illicit dollars are “nested” through so-called intermediates or middlemen that try their hands at the bigger exchanges.
Suex OTC is a virtual currency exchange that allows traders of cryptocurrency in selling and buying digital coins since it is a transaction platform. The US has alleged that it is responsible for mixing the legal trading of digital currency with that of illegal transfers involving ransomware groups. These groups have been found to launder the profits from their attacks on businesses, hospitals, and school districts, aside from a major US fuel pipeline.
The Treasury Department of the United States has accused Suex OTC of playing an instrumental role in assisting criminal hackers cash out loot in form of bitcoins mostly paid by the victims of ransomware before they could change the currency into the traditional currency, Bloomberg News reports.
Since 2018, Suex, has been involved in converting cryptocurrency holdings into cash in offline or Moscow’s brick-and-mortar offices, in the Middle East as well, according to Chainanalysis Inc, reports Bloomberg News.
Chainanalysis Inc is a blockchain forensics company that specializes in following digital currency movements whose list of clients, also included the US Federal agencies. Suex is legally registered in the Czech Republic, but it does not have a physical office there, stated Chainanalysis.
On being added to the list of sanctioned entities by the US Treasury Department, companies based in the United States, as well as individuals, will not be allowed to conduct any transactions with them. These sanctions will be of very little help in exposing Suex to the legal regulators, however, the Biden administration has hopes that this may discourage the victims of ransomware to pay up promptly and so that their ordeal is minimized to some extent.
Cryptocurrency brokers like Suex do not develop their software applications to trade cryptocurrencies. Instead, they make use of third-party crypto exchanges.
The Treasury Department did not comment or disclose the names of these third-party exchanges though. Across, the globe, regulators have called for stringent enforcement and requirements related to regulations and to identify the clients engaged in trading.
According to Bloomberg News, since 2018, Suex has received approximately $160 million in Bitcoins both from high-risk and illicit trades, Chainanalysis said.
If this is found to be true, it accounts for Suex’s 40% of the transactions that are known linked to hacker activity, including about $13 million from a few of the other infamous groups like Conti and Ryuk, Chainanalysis said, reports Bloomberg News.